SEOUL (Reuters) – South Korean asset manager Mirae Asset Global Investments has been sued over a $5.8 billion deal to buy 15 U.S. hotels from China’s Anbang Insurance Group after missing a deadline for the deal’s closing, a Mirae spokesman said on Tuesday.
A consortium led by Mirae agreed last year to buy the hotels in U.S. cities, including in New York, San Francisco and Los Angeles, from Anbang, which had been selling down its overseas assets after the Chinese government took control of the troubled insurer in 2018.
The Mirae spokesman said the deal was originally due to be closed by April 17 but has been delayed because certain conditions were not met by the seller.
He declined to give details of the conditions and said the Mirae consortium is still pursuing the deal and coordinating with the seller.
The Wall Street Journal reported on Monday that China’s Dajia Insurance Group, which has taken over from Anbang the process of selling the 15-hotel portfolio, asked a Delaware court to compel Mirae to complete the purchase for $5.8 billion, citing a filing at the Delaware Court of Chancery.
Dajia Insurance Group is a new company formed to take over assets from Anbang. Dajia, which China has said will remain privately owned, did not immediately reply to Reuters’ emailed request for comment.
It was not immediately clear if other members of the consortium, which is made up of Mirae affiliates and includes Mirae Asset Daewoo (006800.KS), were also sued. It was also not clear whether any damages were being sought.
While the reasons behind the missed deadline on Mirae’s deal are unclear, a growing number of mergers and acquisitions are in danger of collapsing or being delayed as the coronavirus pandemic impacts valuations and clouds the business outlook and funding prospects.
U.S. planemaker Boeing Co (BA.N) cancelled a $4.2 billion deal for Embraer SA’s (EMBR3.SA) commercial aviation division over the weekend, prompting the Brazilian company to initiate arbitration.
Canada’s convenience store chain Alimentation Couche-Tard Inc (ATDb.TO) shelved a $5.6 billion buyout of petrol station operator Caltex Australia Ltd (CTX.AX) last week as fuel demand plunges and it looks inward to get through the crisis.
Travel and tourism industries are one of the hardest hit by the pandemic, with hotels in affected regions seeing sharp declines in bookings, according to analysts and industry sources.
South Korean state-owned banks said last week they would provide up to 2.9 trillion won ($2.37 billion) in combined liquidity to support Korean Air Lines (003490.KS) and Asiana Airlines (020560.KS) as the travel industry reels from the coronavirus crisis.
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